Gerard and Tony organize an LLC by investing $55,000 and $45,000 respectively. The operating agreement states that profits are to be shared in the ratio of 55:45 between Gerard and Tony and makes no mention of sharing losses. The LLC incurs a loss of $100,000 in its first year. How is this loss shared?

Question

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The operating agreement states that profits are to be shared in the ratio of 55:45 between Gerard and Tony, but makes no mention of sharing losses. Therefore, the losses are shared equally between the two members.

Gerard and Tony Organize an LLC by Investing $55,000 and $45,000